Impact Management | May 11, 2021

ESG scorecards for countries

Amy Cortese
ImpactAlpha Editor

Amy Cortese

ImpactAlpha, May 11 – Impact investors dealing with countries flagged for social and governance concerns, such as Saudi Arabia or China, should proceed with caution. But such issues are not confined to autocratic or developing nations.

In the “E” department, climate change will impact nearly every corner of the globe. Two-thirds of countries evaluated by Moody’s in a recent analysis are exposed to at least one high or very high risk climate hazard.

Nearly 70% of countries saw their scores decline in The Economist’s 2020 Democracy Index. The Social Progress Imperative’s index looks at how well countries provide for basic human needs, wellbeing and opportunity. Scandanavian countries top Robeco’s Country Sustainability Ranking, which takes into account 40 ESG indicators. Institutional Shareholder Services and MSCI also assess countries’ ESG performance.

In last year’s ranking of civil and political liberties by Freedom House, the U.S. dropped 10 points to 83, just behind Argentina and Mongolia. It’s too easy to blame the sharp drop on policies of then-President Trump. The underlying causes – racial injustice, money in politics, and polarization and extremism – transcend administrations.